In Digest, Feature Articles, Ukraine

By Andrey Panevin, published on Slavyangrad.org, June 25, 2015

The Ukrainian crisis can be viewed as being composed of several interconnected factors, from the civil war to rampant corruption, and the wider geopolitical ramifications of American confrontation with Russia. Another—relatively overlooked—factor is the ongoing conflict over Ukraine’s natural resources.

Black earth in UkraineOf particular interest to transnational corporations and their puppet local oligarchs is the ‘black earth’ of Ukraine. Black earth, or ‘Chernozem’, is found in two major zones on earth, one of which encompasses sections of Moldova, Russia and Ukraine. Black earth is characterized by its very high fertility and, consequently, its capacity for producing a high agricultural output.

International corporations have long been utilizing loopholes and political lobbying in order to overturn a Ukrainian moratorium on land sales to foreigners. By leasing numerous parcels of land, these companies anticipate both the Ukrainian government’s desperation for money and the EU obligations to force open a goldmine of agricultural exploitation. The role of the ‘big players’—Monsanto, Cargill and Dupont—has been explored previously. The focus of this article is on agro-holding companies and individual oligarchs who seek to buy up and sell out Ukrainian land and livelihood.

Key players in the takeover of Ukrainian agriculture

Key players in the takeover of Ukrainian agriculture

One of the largest agro-holding companies operating in Ukraine is AgroGeneration. It seeks to “transform the land it works and today outperforms Ukrainian average yields. The company follows a traditional crop rotation and puts money into first-class fertilizers, seeds, and agricultural chemicals for the purpose of achieving profitability per crop.”

AgroGeneration has amassed 120,000 hectares of arable land. Seventy thousand of those hectares are located in Kharkov oblast, whose eponymous capital is a city of great political and military importance in Ukraine. Kharkov has a large ethnic Russian and Russian-speaking population that has been actively repressed by the Kiev authorities and it remains a region of dissent against the Kiev regime.

Agricultural land in Ukraine controlled by AgroGeneration (www.agrogeneration.com)

Agricultural land in Ukraine controlled by AgroGeneration (www.agrogeneration.com)

Michael Bleyzer, the Kharkov-born chairman of AgroGeneration and founder of its sibling companies Sigma-Bleyzer and the Bleyzer Foundation, recognizes the importance of the city and has actively spoken about the need to maintain political and military order within it. In an op-ed for the KyivPost, Bleyzer writes of Kharkov as the most critical region, in need of being made “a very high priority. A large segment of the population in Kharkiv oblast is so discouraged by events and by the constant bombardment of Russian propaganda that they could be supportive of a Russian invasion or an attempt to establish a so-called People’s Republic.”

Bleyzer further advocates a ‘Social Stabilization Fund’ for Kharkov, Dnepropetrovsk, Zaporozhia, Kherson, Nikolaev and Odessa. It is worth noting that these regions all contain either chernozerm or, as in the case of Odessa, ports through with which agricultural products transit.

Michael Bleyzer’s role as a mouthpiece for the Kiev regime’s ‘war’ against Russia extends past his personal business interests and falls in line with the broader neoliberal, capitalist takeover of Ukraine. AgroGeneration and Sigma-Bleyzer (a private equity firm also owned by Bleyzer) seek to take advantage of the current regime’s plea to the West to ‘buy Ukraine’.

These corporations and others are not only taking control of Ukraine’s farm land, they are doing it with European and American government assistance. In 2005, Sigma-Bleyzer received financing for a project worth up to 250 million euros from the European Bank for Reconstruction and Development (EBRD). In 2011, the EBRD gave AgroGeneration ten million dollars to double its ownership of Ukrainian land. In 2012, the Overseas Private Investment Corporation (OPIC)—an American government financial institution—gave Sigma-Bleyzer fifty million dollars for its ‘Eastern Europe fund.’

While these international corporations receive vast sums of money for their expansion in Ukraine, ‘access to credit remains a major problem for Ukraine’s small and medium farmers’. This interconnected system of funding from government finance institutions to private corporations has spelled doom for Ukraine’s agricultural sector, opening it up to exploitation and eventual ruin from the inside out.

Connections between government and private corporations are at the core of this exploitation, with both entities seeking to employ what Bleyzer himself refers to as a system of “quasi-private equity funds managed by money managers from the private sector whenever possible.” Bleyzer’s attitude to the financial invasion of countries was well honed during the U.S.-led invasion and occupation of Iraq, where he actively encouraged the U.S. government to “create and implement the policy measures that will make an attractive investment climate in Iraq. This public-private partnership could play a critical role in making possible dramatic social and economic changes in Iraq and other countries in the region.”

The goal of the corporate annexation of sovereign policy-reform has served Bleyzer and countless other oligarchs well from Iraq to Ukraine. In the context of this corrupt, financially imperialist environment, it is no wonder that in a May 2015 economic report by Sigma-Bleyzer, it is casually written (in reference to the Ukrainian civil war) that “a frozen conflict could still provide the opportunity for the rest of the country to restart investments and economic growth.”

Ukraine’s precious black earth is being steadily annexed by international corporations and joins the list of resources and national sectors being outsourced to private investors. Agricultural corporations such as AgroGeneration find great corporate solidarity on the board of members of the US-Ukraine Business Council, which includes (among others) Sigma-Bleyzer, Monsanto, Dupont, Cargill, Exxon, Raytheon and the Bleyzer Foundation.

These corporations share the common goal of pressuring the Ukrainian government to institute political ‘reforms’ in their favour. For agricultural corporations in particular, the goal is to pressure the government to “think about privatization. They need to prepare everything to allow for farmland sales (to foreign and domestic investors) in three to four years,” as stated by Heinz Strubenhoff, the agribusiness investment manager for the World Bank in Ukraine.

Ukraine is at a national crossroads and if the example of its increasing corporate annexation is anything to go by, it will have neither the money nor the resources to rebuild itself in the face of its political and cultural self-destruction. The West-supported preoccupation with ‘Russian invaders’ has left the oligarchy free to sell Ukraine’s political processes and natural resources to the highest bidder.

Andrey Panevin is an independent writer and analyst interested in geopolitics, media bias and the environment. He is currently in his final year of a history and literature degree.  His work has been published on Russia Insider. He publishes a website The Barricade. Slavyangrad.org welcomes him in June 2015 as a regular contributor.

Read also:
The new conquistadors: How international corporations are taking over Ukraine’s agriculture, by Andrey Panevin, published on the author’s website The Barricade, Feb 10, 2015

 

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